In the U.S., large company stocks were little changed for the week but small company stocks had modest gains. Foreign stocks were generally lower. The Federal Reserve met this week and while leaving short term interest rates unchanged, they announced they would start trimming their balance sheet in October. So, instead of reinvesting all the proceeds of maturing bonds in its $4.5 trillion portfolio, the FED will start letting $10BN worth of bonds mature. Essentially, the FED created money to buy bonds during the quantitative easing and now the proceeds from the maturing bonds will be destroyed. The FED plans to increase the $10BN every three months until they start unwinding $50BN worth of bonds per month. Also, 12 out of 16 FED members said they expect one more short-term rate hike by year’s end. Treasuries were lower for the week as interest rates rose. The dollar rose against a basket of currencies as gold fell. Crude oil managed to stay above $50 per barrel.
In the numbers, this week:
- The National Association of Realtors reported that existing-home sales fell 1.7% in August. The August decline was attributed to Hurricane Harvey. However, from a year-ago, existing home sales are up only 0.2% mostly due to short supply and higher prices. The median price of a new home is up 5.6% from a year ago.
- The Federal Reserve reported that total net worth of households grew $1.7 trillion in the second quarter to $96.2 trillion.
- The Commerce Department reported
- Housing starts fell 0.8% in August with single family homes rising 1.6% and multifamily homes falling 6.5%. For the first eight months of 2017 starts were up 2.7%
- Permits for new construction, an indicator of future starts, have risen 7.5% for the first eight months of the year compared to last year.
- Business inventories rose 0.2% in August after rising 0.5% in July.
- The Labor Department reported initial claims for unemployment fell 23,0000 to 259,000. Claims were expected to rise given Hurricane Irma but that didn’t happen.
- The Energy Information Administration’s Weekly Petroleum Data report is attached.
- The Energy Information Administration reported
- Weekly field production of crude oil rose 157,000 barrels per day in the prior week, further rebounding from Hurricane Harvey.
- Natural gas in storage rose 97Bcf last week from the prior week. This is in-line with the 5-year average this time of year.
- Baker Hughes reported that oil drilling rigs fell 5 to 744. Gas drilling rigs rose 4 to 190.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik Smith
President Managing Partner
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.